FLDS Church: $3.2 Million Allegation

Down the Drain: Millions missing from coffers of Hildale/Colorado City water nonprofit.

Before licensed engineer Zachary Renstrom went to inspect water wells near the polygamous border towns of Hildale, Utah, and Colorado City, Ariz., in 2008, he e-mailed municipal officials that he was coming. But when he went to the wells, they were locked-—something that city employees told him during a previous inspection never happened.

Renstrom was hired by the United Effort Plan [UEP] trust, which owns most of the land and homes of the two towns, to assess the water system. In 2006, court-appointed special fiduciary Bruce Wisan took over the UEP, a communal trust set up in 1942 by the Fundamentalist Church of Jesus Christ of the Latter Day Saints [FLDS], which has long been thought to run the Hildale and Colorado City municipalities.

Despite the lock-out, Renstrom says that information he got from government officials in Utah and Arizona showed that, with some improvements, the water system could provide water for many of the vacant properties and undeveloped lots in the towns. Hildale and Colorado City officials, though, have refused to allow improvements, unless the cash-strapped UEP pays for them. UEP officials, however, allege that the money that should have been invested in developing the water system over the past 10 years has instead been siphoned off by FLDS church leadership. These concerns come in the wake of Utah and Arizona police officers on April 6 searching for evidence of “misuse of public funds” and city government-related fraud, according to a Mohave County Sheriff’s Office press release.

According to the UEP’s Wisan, from 2002 to 2009, checks totaling up to $3.2 million were cut by FLDS members and trustees of an unregulated nonprofit water company, called Twin City Waterworks (TCWW), to businesses that appeared to have very little to do with water management. Wisan suspects some of the missing cash was used for construction and materials shipping costs on behalf of the FLDS compound called Yearning for Zion, outside of Eldorado, Texas. The net result of the alleged misappropriations, UEP officials argue, is that the water company’s coffers have been looted, which in turn is stalling development of new homes—including providing water for a severely handicapped man and his desperately in-need family.

Stirba & Associates’ attorney Blake Hamilton, which represents Hildale and Colorado City, is frustrated by Wisan “trying to paint the picture of the twin cities being the arm of the [FLDS] church.” TCWW, he says, is a separate entity that has nothing to do with the twin cities. The twin cities “can’t control how [TCWW] spends its funds.”

A UEP court filing states the TCWW was set up in 1972 to distribute culinary water to Hildale and Colorado City homes. No one answered calls at TCWW to speak to reporters. Currently it receives around $400,000 annually for bulk water sales to the twin cities. That water comes from mostly UEP wells, but the trust has yet to see a dime from those sales, complains former state auditor Val Oveson, who is now a consultant for Wisan.

Wisan’s allegations “of massive amounts of money [being] misappropriated” from the TCWW came after a UEP forensic analysis of TCWW’s bank records revealed, among other things, almost 100 checks written with large round numbers—a red flag for accountants looking for fraud—says Oveson.

Most notably, the FLDS Storehouse, which provides food and clothing to the community, received $145,103.82—$44,000 of which were round-numbered checks. Also, dozens of other similarly suspect checks were cut to construction companies, even though FLDS prophet Warren Jeffs—now incarcerated for 10 years at Utah State Prison for being an accomplice to rape—had prohibited any building from 2002 onward.

Follow the checks, says UEP consultant, ex-FLDS insider and Hildale resident Jethro Barlow, “and you notice that the surplus funds, beyond payroll and operating cost, had a pattern of being transferred to the [FLDS] church in some fashion.”

Insight into the spending patterns was provided by a court-filed 2006 letter to Warren Jeffs from FLDS member, then-Colorado City town clerk and TCWW trustee Joseph Allred. Allred signed 434 TCWW checks totaling over $700,000, according to the UEP’s analysis of TCWW’s accounts. Allred wrote to Jeffs “seeking counsel on whether or not to continue paying some home bills from the company funds.” He noted that half the nonprofit’s expenses covered costs relating to Allred’s father’s home. The TCWW account, Allred continued, was used to pay home utilities’ bills of $4,000 a month, “mother’s cell phones (about $200-300/month), car insurance … and a new van payment of $900 per month.”

UEP lawyers stated in a filing “this was a far cry” from the 1996 agreement between TCWW and Hildale and Colorado City, which included “extending lines and installing meters to provide service to new customers.”

According to Allred’s letter, TCWW has never been audited. Barlow blames both Hildale and Colorado City, along with a St. George CPA who annually audits the municipalities, for not including TCWW. But Utah State Auditor Austin Johnson is more cautious. “On its surface, [TCWW] is not a governmental entity, so we don’t have jurisdiction.” However, if Hildale “exerts an influence over a company like this,” then it would be considered part of the city. Johnson said the CPA told him that, after standard accounting assessments, he didn’t believe the waterworks should be included.

Johnson isn’t the only one looking at the water company. Both the Utah and Arizona attorneys general, neither of whom would comment, are also investigating.

Ron and Jinjer Cooke, who were featured in City Weekly’s Dec. 10, 2009, cover story “Polygamist vs. Polygamist,” see those alleged misappropriations in bleak, personal terms. They have been living for two years in a squalid trailer, waiting for Colorado City to hook up water to a half-finished property given to them by the UEP, for which the original builder had secured permits for utility hookups. Ex-FLDS member Ron Cooke is severely disabled and, in December 2008, filed a complaint with the Arizona attorney general civil-rights division over what he alleged was housing discrimination by Colorado City.

Hildale and Colorado City attorney Hamilton, in a filing, alleged the UEP was using the Cookes’ case to overturn Hildale and Colorado City’s 2007 decision to add no more hookups because of a water shortage. Barlow scoffs at such an idea. “For 10 years, $400,000 has annually flowed into a black hole, and for the cities to say now there’s not enough water to cover the Cookes is a glaring case of mismanagement.”

Without the municipal water, the Cookes are forced to haul their own water to the property and haul the sewage offsite from their trailer.

Jinjer Cooke says that “it’s pretty frustrating” to see money intended to “provide services to existing and new customers being used as a slush fund. That’s hard to swallow.”